Uruguay - Thermal Project : Loan 0132 - Loan Agreement - Conformed

LOAN NUMBER 132 UR Loan Agreement (Thermal Project) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND ADMINISTRACION GENERAL DE LAS USINAS ELECTRICAS Y LOS TELEFONOS DEL ESTADO DATED AUGUST 29, 1955 AGREEMENT, dated August 29, 1955, between INTER- NATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and ADMINISTRACION GENERAL DE LAS USINAS ELECTRICAS Y LOS TELEFONOS DEL ESTADO (here- inafter called the Borrower). ARTICLE I Loan Regulations SECTION 1.01. The parties to this Loan Agreement accept all the provisions of Loan Regulations No. 4 of the Bank dated October 15, 1952 (hereinafter called the Loan Regu- lations), with the same force and effect as if they were fully set forth herein. ARTICLE II The Loan SECTION 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in this Agreement set forth or referred to, an amount in various currencies equivalent to five million five hundred thousand dollars ($5,500,000). SECTION 2.02. The Bank shall open a Loan Account on its books in the name of the Borrower and shall credit to such Account the amount of the Loan. The amount of the Loan may be withdrawn from the Loan Account as provided in, and subject to the rights of cancellation and suspension set forth in, the Loan Regulations. SECTION 2.03. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one per 4 cent (34 of 1%) per annum on the principal amount of the Loan not so withdrawn from time to time. The date specified for the purposes of Section 2.02 of the Loan Regulations is 60 days after the date of this Agree- ment or the Effective Date, whichever shall be the earlier. SECTION 2.04. The Borrower shall pay interest at the rate of four and three-fourths per cent (43/47o) per annum on the principal amount of the Loan so withdrawn and out- standing from time to time. SECTION 2.05. Except as the Bank and the Borrower shall otherwise agree, the charge payable for special com- mitments entered into by the Bank at the request of the Borrower pursuant to Section 4.02 of the Loan Regulations shall be at the rate of one-half of one per cent (1/2 of 1%) per annum on the principal amount of any such special commitments outstanding from time to time. SECTION 2.06. Interest and other charges shall be payable semi-annually on May 1 and November 1 in each year. SECTION 2.07. The Borrower shall repay the principal of the Loan in accordance with the amortization schedule set forth in Schedule 1 to this Agreement. ARTICLE III Use of Proceeds of the Loan SECTION 3.01. The Borrower shall apply the proceeds of the Loan exclusively to financing the cost of goods re- quired to carry out the Project described in Schedule 2 to this Agreement. The specific goods to be financed out of the proceeds of the Loan shall be determined by agreement between the Bank and the Borrower, subject to modification by further agreement between them. SECTION 3.02. The Borrower shall cause all goods financed out of the proceeds of the Loan to be imported into 5 the territories of the Guarantor and there to be used exclu- sively in the carrying out of the Project. ARTICLE IV Bonds SECTION 4.01. The Borrower shall execute and deliver Bonds representing the principal amount of the Loan as provided in the Loan Regulations. SECTION 4.02. The Presidente and the Gerente Contable of the Borrower and such person or persons as they shall appoint in writing are designated as authorized represen- tatives of the Borrower for the purposes of Section 6.12 (a) of the Loan Regulations. ARTICLE V Particular Covenants SECTION 5.01. (a) The Borrower shall carry out the Project with due diligence and efficiency and in conformity with sound engineering and financial practices. (b) The Borrower shall, if requested to do so, furnish to the Bank, promptly upon their preparation, the plans and specifications for the Project and any material modifica- tions subsequently made therein. (c) The Borrower shall maintain records adequate to identify the goods financed out of the proceeds of the Loan, to disclose the use thereof in the Project, to record the progress of the Project (including the cost thereof) and to reflect in accordance with consistently maintained sound accounting practices the financial condition and operations of the Borrower; shall enable the Bank's representatives to inspect the Project, the goods and any relevant records and documents; and shall furnish to the Bank all such informa- tion -s the Bank shall reasonably request concerning the expenditure of the proceeds of the Loan, the Project, the 6 goods, and the financial condition and operations of the Borrower. SECTION 5.02. (a) The Bank and the Borrower shall co- operate fully to assure that the purposes of the Loan will be accomplished. To that end, each of them shall furnish to the other all such information as it shall reasonably request with regard to the general status of the Loan. (b) The Bank and the Borrower shall from time to time exchange views through their representatives with regard to matters relating to the purposes of the Loan and the maintenance of the service thereof. The Borrower shall promptly inform the Bank cf any condition which interferes with, or threatens to interfere with, the accomplishment of the purposes of the Loan or the maintenance of the service thereof. SECTION 5.03. If the Borrower shall propose to incur any debt, the Borrower shall inform the Bank of such pro- posal and, before the proposed action is taken, shall afford the Bank all opportunity which is reasonably practicable in the circumstances to exchange views with the Borrower with respect thereto; provided, however, that the foregoing provisions shall not apply to: (a) the incurring of ad-. ditional debt through utilization, in accordance with the terms of any credit established prior to the date of this Agreement, of any unused amounts available under such credit; or (b) the incurring of debt maturing not more than eighteen months after the date on which it is originally incurred. SECTION 5.04. The Borrower undertakes that, except as the Bank shall otherwise agree, if any lien shall be created on any assets of the Borrower as security for any debt, such lien will ipso facto equally and ratably secure the payment of the principal of, and interest and other charges on, the Loan and the Bonds, and that in the creation of any such lien express provision will be made to that 7 effect; provided, however, that the foregoing provisions of this Section shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for the payment of the purchase price of such property; (ii) any lien on commercial goods to secure a debt maturing not more than one year after the date on which it is origi- nally incurred and to be paid out of the proceeds of sale of such commercial goods; or (iii) any lien arising in the ordi- nary course of banking transactions and securing a debt maturing not more than one year after its date. For pur- poses of this Section, the term "assets of the Borrower" shall not be deemed to include bonds of the Guarantor owned by the Borrower and for the service of which the Borrower is liable. SECTION 5.05. The Borrower shall pay or cause to be paid all taxes, fees and other fiscal charges, if any, imposed under the laws of the Guarantor or laws in effect in the territories of the Guarantor on or in connection with the execution, issue, delivery or registration of this Agreement, the Guarantee Agreement or the Bonds, or the payment of the principal, interest or other charges thereunder; pro- vided, however, that the provisions of this Section shall not apply to taxation of, or fees or other fiscal charges upon, payments under any Bond to a holder thereof other than the Bank when such Bond is beneficially owned by an individual or corporate resident of the Guarantor. SECTION 5.06. The Borrower shall pay or cause to be paid all taxes, fees and other fiscal charges, if any, imposed under the laws of the country or countries in whose cur- rency the Loan and the Bonds are payable or laws in effect in the territories of such country or countries on or in connection with the execution, issue, delivery or registration of this Agreement, the Guarantee Agreement or the Bonds. SECTION 5.07. Except as shall be otherwise agreed be- tween the Bank and the Borrower, the Borrower shall 8 insure or cause to be insured the goods financed with the proceeds of the Loan against risks incident to their pur- chase and importation into the territories of the Guarantor. Such insurance shall be consistent with sound commercial practice and shall be payable in dollars or in the currency in which the cost of the goods insured thereunder shall be payable. SECTION 5.08. (a) The Borrower shall at all times main- tain its existence and right to carry on operations and shall, except as the Bank shall otherwise agree, maintain and renew all rights, powers, privileges and franchises owned by it and necessary or useful in the operation of its business. (b) The Borrower shall maintain its plants, equipment and property, and from time to time make all necessary renewals and repairs thereof, all in accordance with sound engineering standards, and shall at all times operate its plants and equipment and maintain its financial position in accordance with sound business and public utility prac- tices. (c) The Borrower shall not, without the prior consent of the Bank (i) sell or otherwise dispose of all or substan- tially all of its property and assets unless the Borrower shall first redeem and pay or make adequate provision satisfactory to the Bank for redemption and payment of all of the Loan which shall be outstanding and unpaid; or (ii) sell or otherwise dispose of all or substantially all of the property included in the Project or any plant included therein unless the Borrower shall first redeem and pay or make adequate provision satisfactory to the Bank for redemption and payment of a proportionate part of the Loan which shall then be outstanding and unpaid equal to the proportionate part of the Project so sold or disposed of. The Borrower may, however, without reference to the fore- going, sell or otherwise dispose of any property which shall have become old, worn-out, obsolete or unnecessary for use in its operations. 9 SECTION 5.09. The Borrower shall, whenever funds are needed to enable it to carry out the Project or to enable it to meet its other obligations, defer payment of principal, interest and other charges due to the Guarantor on loans made by the Guarantor to the Borrower or required to service indebtedness incurred on account of borrowing by the Guarantor for the Borrower. The Borrower shall from time to time make arrangements with the Guarantor where- by amounts due on account of any deferred payments shall be funded on a long-term basis or shall be capitalized. ARTICLE VI Remedies of the Bank SECTION 6.01. (i) If any event specified in paragraph (a), paragraph (b), paragraph (e) or paragraph (f) of Section 5.02 of the Loan Regulations shall occur and shall continue for a period of thirty days, or (ii) if any event specified in paragraph (c) of Section 5.02 of the Loan Regulations shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower, then at any subsequent time during the continu- ance thereof, the Bank, at its option, may declare the prin- cipal of the Loan and of all the Bonds then outstanding to be due and payable immediately, and upon any such declara- tion such principal shall become due and payable immedi- ately, anything in this Agreement or in the Bonds to the contrary notwithstanding. ARTICLE VII Miscellaneous SECTION 7.01. The Closing Date shall be December 31, 1957. SECTION 7.02. A date 60 days after the date of this Agreement is hereby specified for the purposes of Section 9.04 of the Loan Regulations. 10 SECTION 7.03. The following addresses are specified fnr the purposes of Section 8.01 of the Loan Regulations: For the Borrower: Administraci6n General de las Usinas El'ctricas y los Tel6fonos del Estado Palacio de la Luz-Paraguay 2431 Montevideo, Uruguay For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington 25, D. C. United States of America IN TVITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Loan Agreement to be signed in their respec- tive names and to be delivered in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By R. L. GARNER Vice President ADMINISTRACION GENERAL DE LAS USINAS ELECTRICAS Y LOS TELEFONOS DEL ESTADO By JOSE A. MORA Authorized Representative 11 SCHEDULE 1 Amortization Schedule Principal Payment of Amount Outstanding Principal After Each Payment Date (expressed in (expressed in Payment Due dollars) * dollars) * November 1, 1957 - $5,500,000 May 1, 1958 $103,000 5,397,000 November 1, 1958 105,000 5,292,000 May 1, 1959 108,000 5,184,000 November 1, 1959 110,000 5,074,000 May 1, 1960 113,000 4,961,000 November 1, 1960 115,000 4,846,000 May 1, 1961 118,000 4,728,000 November 1, 1961 121,000 4,607,000 May 1, 1962 124,000 4,483,000 November 1, 1962 127,000 4,356,000 May 1, 1963 130,000 4,226,000 November 1, 1963 133,000 4,093,000 May 1, 1964 136,000 3,957,000 November 1, 1964 139,000 3,818,000 May 1, 1965 142,000 3,676,000 November 1, 1965 146,000 3,530,000 May 1, 1966 149,000 3,381,000 November 1, 1966 153,000 3,228,000 May 1, 1967 156,000 3,072,000 November 1, 1967 160,000 2,912,000 May 1, 1968 164,000 2,748,000 November 1, 1968 168,000 2,580,000 May 1, 1969 172,000 2,408,000 November 1, 1969 176,000 2,232,000 May 1, 1970 180,000 2.052,000 November 1, 1970 184,000 1,868,000 May 1, 1971 189,000 1,679,000 November 1, 1971 193,000 1,486,000 May 1, 1972 198,000 1,288,000 November 1, 1972 202,000 1,086,000 May 1, 1973 207,000 879,000 November 1, 1973 212,000 667,000 May 1, 1974 217,000 450,000 November 1, 1974 222,000 228,000 May 1, 1975 228,000 - * To the extent that any part of the Loan is repayable in a currency other than dollars (see Loan Regulations, Section 3.02), the figures in these columns represent dollar equivalents determined as for purposes of withdrawal. 12 Premiums on Prepayment and Redemption The following percentages are specified as the premiums payable on repayment in advance of maturity of any part of the principal amount of the Loan pursuant to Section 2.05 (b) of the Loan Regulations or on the redemption of any Bond prior to its maturity pursuant to Section 6.16 of the Loan Regulations: Time of Prepayment or Redemption Premium Not more than 5 years before maturity. . / of 1% More than 5 years but not more than 10 ycars before maturity ... ...... .. 1% More than 10 years but not more than 15 years before maturity .......... . 1/4% More than 15 years before maturity ... 2 /% 13 SCHEDUL31 2 Description of the Project The capacity of the Jose Batlle y Ordonez Generating Station in Montevideo will be increased to 150,000 kw through: (a) the installation (and interconnection with existing generating facilities in the station) of one 62,500 kva (50,000 kw at .8 power factor) three-phase, 50-cycle enclosed alter- nating current turbo-generator to operate at 3,000 r.p.m., with the necessary auxiliary equipment, (b) the installation of one or more boilers with conven- tional auxiliary equipment, having a total rated capacity of 225,000 kg per hour at a pressure of 64 kg per square centimeter at a temperature of 482 degrees Centigrade, (c) the installation of fuel handling equipment capable of preparing and delivering to the boilers either pulverized coal or fuel oil or both pulverized coal and fuel oil simul- taneously, and of adequate ash handling equipment, (d) the erection of the necessary structures to support and house the boiler equipment and auxiliaries, (e) the installation of the equipment necessary to con- nect the plant to the existing 31.5 kv network of the Bor- rower. The equipment will be suitable for connection to a proposed high voltage collector ring.